Advanta Corp, a small-business credit card lender that recently shut 1 million
accounts, has entered two agreements with the U.S. Federal Deposit
Insurance Corp, including one involving alleged 'unsafe or unsound'
practices that requires it to refund up to $35 million to customers.
The first agreement addresses charges that the Spring House,
Pennsylvania-based company violated federal trade laws through its
pricing strategies on business credit cards, and in its marketing of
cash-back rewards on the cards. Advanta said it will take a
second-quarter charge to cover refunds over its pricing strategies,
which it said could total $21 million. It previously took a $14 million
charge to cover refunds tied to the alleged marketing violations.
Advanta also agreed to a $150,000 fine.
Read the whole article at http://www.forbes.com/feeds/afx/2009/07/01/afx6608379.html
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